NBS reports $99m drop in foreign telecom investments in Q3
Foreign investments in Nigeria’s telecommunications sector plummeted from $113.42 million in Q2 2024 to $14.4 million in Q3 2024, representing an 87% decline, according to the National Bureau of Statistics.
This $99.02 million drop, signals potential challenges such as economic instability, regulatory issues, or declining investor confidence in the sector.
The NBS, in its capital importation report released on Friday, revealed a 77% year-on-year decline in foreign investments in Nigeria’s telecommunications sector, dropping from $64.05 million in Q3 2023 to $14.4 million in Q3 2024.
This sharp decline highlights the sector’s ongoing struggles with infrastructure deficits and high operating costs, despite its considerable growth potential.
Capital importation refers to the inflow of foreign funds or investments into Nigeria’s telecommunications sector. It encompasses all forms of capital brought into the country by foreign entities to support business activities and investments within the sector.
In Q1 2024, capital importation into Nigeria’s telecommunications sector surged to $191.5 million, marking a 769% increase from $22.05 million in Q1 2023 and surpassing the total foreign investments of $134.75 million recorded in all of 2023.
Similarly, Q2 2024 recorded $113.42 million in inflows, a 339% rise compared to $25.81 million in Q2 2023.
The sharp decline in capital importation in Q3 2024 comes against the backdrop of persistent challenges in Nigeria’s telecommunications sector, including foreign exchange constraints, policy uncertainties, and inadequate infrastructure.
The sector also faces high operating costs driven by rising inflation, despite its critical role in the economy, contributing significantly to GDP and delivering essential services to millions of Nigerians.
The Association of Licensed Telecom Operators of Nigeria (ALTON) and the Association of Telecommunication Companies of Nigeria are raising concerns about the increasing operational challenges in the telecom sector.
They highlight issues such as rising costs, infrastructure deficiencies, and regulatory pressures, warning that without government intervention, the industry’s sustainability could be at risk.
To address this, they advocate for a tariff increase to offset the impact of high operating costs, which include energy expenses, foreign exchange difficulties, and infrastructure maintenance.
